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Stephen Henderson: Report exposes bridge owner’s lies

It doesn’t say so in explicit terms, but the upshot of the Anderson Economic Group’s study of the two Detroit River bridge proposals is this: Ambassador Bridge owner Matty Moroun has been lying his pants off about the plan to build a publicly owned second span.

Moroun’s ad campaign has said over and over again that the “government bridge” would stick Michigan taxpayers with a huge liability — “billions,” according to the commercials. And in ads that began recently, the Morouns even claim that building the new bridge would siphon money from other road projects around the state.

Anderson’s study reveals these as monstrous prevarications. Anderson confirms that the public bridge, now called the New International Trade Crossing, will be financed with money from the Canadian government and revenue bonds. The U.S. General Services Administration would pay for a new inspections plaza.

And the money would be repaid with toll revenues backed by the Canadian government and the bond lending institution. Liability for taxpayers is assessed by Anderson as as “Limited; risk rests with the Canadian government and/or bond underwriting institution(s).”

Moreover, NITC would actually help fund other road projects in Michigan because the federal government has agreed to use the Canadian contribution to the bridge as state matching money for $2.2 billion in federal highway funds. Given Michigan’s lousy record on gas tax revenues and other local road funding, it’s fair to guess that building the bridge may be the only way many vital road projects have a prayer of getting the money they will need to be completed.

Anderson’s words matter, because they don’t come from the governor or the project’s many business, civic or legislative supporters. Anderson is independent, and his team is fairly characterized as a group of pretty conservative economists.

If the public bridge were a boondoggle that we’d get stuck paying for, Anderson would probable have delighted in saying so.

Certainly, the Anderson report lends credibility to the renewed push Gov. Rick Snyder plans for the public bridge this fall.

Anderson’s report, overall, does a very credible job of assessing both the public bridge and Moroun’s private bridge from a number of different angles.

The public bridge doesn’t win out on every count, but comes out overall as the far superior option.

Moroun’s bridge, for example, would be cheaper overall, because a lot of the infrastructure for it — toll plazas and ramps to freeways — already exist for the Ambassador. Moroun’s new bridge would be a twin span.

Moroun’s bridge would also be less susceptible to high tolls if traffic projections don’t hold up, according to Anderson, because NITC will cost more.

Anderson also reviewed 10 large public infrastructure projects over the past 20 years, and found that they had average cost overruns of 61%. That could push NITC’s costs even higher, making it even more critical that traffic projections pan out to avoid higher tolls.

But NITC has more important advantages over Moroun’s plans.

The biggest is its leveraging of the $2.2 billion in road funds that Michigan would likely forgo without NITC. This state has underfunded its roads for decades, and there’s no sign of a political will to reverse that. NITC is a convenient political workaround.

NITC would also address congestion at the border, while Moroun’s bridge wouldn’t. Anderson concludes that the only way to solve backups (which are primarily about the customs plaza) is by adding customs infrastructure and highway connections. Moroun’s twin span wouldn’t do that.

Most important, NITC has the preliminary backing from both the United States and Canadian governments. Moroun’s bridge has neither, and has been met with sharp opposition on the Canadian side.

NITC has begun the environmental permitting process, with Anderson says can take five years. Moroun has not even requested environmental permits, Anderson found.

At worst, Moroun’s bridge would be built on a significantly delayed timetable, when compared to NITC. At worst, Moroun could fail to ever move the Canadians off their opposition.

And trade in both countries would continue to be hostage to the Moroun monopoly.

Anderson is just the latest (though highly credible) voice to make the argument that the public bridge makes more sense.